While the wealthy tycoons in the Kevin Kwan novel, and movie, Crazy Rich Asians might just be fictional characters, there is some truth in that story. In recent years, some of the wealthiest families in the region have been flocking to Singapore’s sunny shores and made the city their home. As a result of the influx of wealth, there has been an increase in demand for high-end goods and services within the city-state, reshaping the local economy.
Singapore has always been a prime destination for wealthy families in the region looking for a short vacation. With the opening of the luxury integrated resort, Marina Bay Sands, in 2010, the many designer boutiques along Orchard Road, and range of world-class private clinics and hospitals, it isn’t hard to see the appeal. However, with the recent pandemic sweeping across the globe, Singapore has started to see an increase in the number of wealthy families migrating into the country and buying up real estate to weather the storm.
The country’s current status as a safe haven for super rich is due to Singapore’s strong reputation of stability and security, which are particularly salient issues given the current climate. According to data from John Hopkins University, the mortality rate in Singapore has been markedly lower compared to many of its neighbours. Referring to said data, Malaysia and Indonesia are facing mortality rates exceeding 10 and 30 times the percentage experienced in Singapore. Even with the recent spike in cases, which prompted stricter measures and cancellation of internationally significant events, the number of infections are still much lower compared to other cities across the world.
Given the phenomenal stability and security Singapore has managed to establish in this current climate, it is little wonder that families from Indonesia, Malaysia and China, to name a few countries, are choosing to ride out the storm here. Of course, with the amount of wealth now flowing around Singapore, it’s bound to affect the local economy in one way or another.
Firstly, there has been a significant increase in the number of single family offices being set up in the country. The current number stands at around 400, which is twice the number at the end of 2019. Chinese clients are responsible for opening the most new accounts, followed by Indian and then Indonesian clients. According to Harish Bahl, the founder of Smile Group which focuses on tech investments, this represents the largest number of super rich clients he’s met in his 20-plus years of experience.
According to Bahl, “since the pandemic, billionaires from all over the world have been staying on longer in Singapore, including those from China, Indonesia, India and the US,” which creates incentives to set up family offices.
With initiatives like the Global Investors Program (GIP), Singapore has made it simpler for wealthy tycoons to settle down. The program gives business owners and families a shortcut to permanent residency provided they “they invest S$2.5 million in a local business, certain funds or a family office with at least S$200 million in assets.” Additionally, the Monetary Authority of Singapore (MAS) introduced the Variable Capital Company (VCC) which enhances the attraction for family offices, hedge funds and private equity firms.
As the numbers of the super rich rose in Singapore, so too did the demand for luxury products and services. Prior to the new measures which prohibited dining-in, fine dining restaurants such as the three-Michelin-star Odette were completely booked for months.
“We have a lot of Indonesians, for example, over the past few months trying to come in every two to three weeks,” commented Odette’s General Manager and Operations Director Steven Mason.
Demands for golf club memberships have also increased significantly, driving up prices. The Sentosa Golf Club, for example, saw increases of 40% from pre-covid prices. The same can be said of the automotive industry, with sales of high-end cars to foreigners rising between 50-60% compared to a year before. According to Vincent Tan, founder of the luxury car dealer, Vincar, the Chinese make up the largest percentage of clients, with Roll-Royce, Bentley, Porsche, and Mercedes being the most popular brands amongst foreign business owners.
To summarise, Singapore’s reputation as stable and secure city-state have made it into a sanctuary of sorts for the super rich to wait out the global pandemic. With the influx of wealth and investments, the nation’s economy is doing relatively well compared to many of its neighbours as demand for luxury products and services increases. Looking beyond our current situation, it is likely that these families may well choose to prolong their stay as Singapore’s outlook post-covid improves and the bustling city returns to normalcy.